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Seminar on "Preparing the Philippines for Industry 4.0"


Thursday, 27 June 2019 - Dr Rafaelita Aldaba, Undersecretary for Competitiveness and Innovation of the Philippine Department of Trade and Industry (DTI), began the seminar by examining the recent economic performance of the Philippines. In particular, she emphasised that the Philippines was the third fastest-growing economy in Asia in 2018. Its solid macroeconomic fundamentals has helped it to remain a bright spot in Asia. One of the main drivers of growth in Philippines is manufacturing. She opined that many conditions converged for the manufacturing resurgence in Philippines, such as rising manufacturing costs in China, a growing domestic market, a steadily rising middle class, good macroeconomic performance, consumer confidence, and moderate wage increases.

Dr Cassey Lee chaired the lecture by Dr Rafaelita Aldaba. (Credit: ISEAS - Yusof Ishak Institute)

With that, she shifted her focus towards the 4th Industrial Revolution in Philippines and its potential implications on industries. She briefly talked about the current situation, where most industries in the country are still transitioning from Industry 2.0 to 3.0. There may also be potential employment impact, with low-skilled, low-educated and routinized jobs most vulnerable to the adverse effects of technological change.

She then talked about the new Industrial Strategy, namely the i3S inclusive innovation industrial strategy, which aims to build an innovation and entrepreneurship ecosystem, remove obstacles to growth, link manufacturing with agriculture and services and strengthen domestic supply chains so as to allow for participation in global and regional value chains.

Ms Aldaba highlighted the contemporary strengths and weaknesses of the innovation ecosystem, and introduced the inclusive Filipinnovation & Entrepreneurship Roadmap which aims to bridge the gaps in the ecosystem.

She then elaborated on the initiatives for economic transformation in the country, focusing particularly on the Philippine Startup Ecosystem with a current worth of US$378 million, and asserted that this is a young market full of potential and embedded capabilities.

Following that, she presented some digital economy statistics of the Philippines, emphasizing that Philippines has the highest internet and social media use worldwide with 116% of the population having a mobile subscription. She pointed out that this signals immense potential for business, particularly for e- commerce. The Philippines is also focusing on developing itself as an AI Center, with universities offering undergraduate courses in data science. There has also been marked effort in building the Philippines Electronic Vehicle Ecosystem, which is a young market with 63% of users below 40 years old.

Ms Aldaba concluded the session by suggesting a few ways for Philippines to move forward. She asserted that many remain limited in their digital involvement due to limited awareness of the benefits of digitalization and skill gaps. More attention should be given to internet connectivity, broadband access, computerization, and electricity supply. There is also a need to adjust the education and training systems to deliver the skills required in the digital economy, and to ensure that the shift towards a digital economy does not leave any person, enterprise or region behind. Thus, there is a need for strong government-academe-industry collaboration so as to institutionalize proper policy framework and innovation strategy, as well as enable industries to take advantage of opportunities from Industry 4.0 to serve as the country’s engine for sustainable and inclusive growth.

Some of the audience at the seminar. (Credit: ISEAS - Yusof Ishak Institute)